Trade body calls for initiatives to be more inclusive of ‘entire ecosystem’
The National Association of Commercial Finance Brokers (NACFB) has responded to the publishing of the House of Commons Treasury Committee report on SME finance, which highlighted the challenges small businesses face in accessing finance in the UK’s post-pandemic, post-energy shock era.
The report – which incorporates direct evidence given by the NACFB – called for enhanced regulatory powers for the Financial Conduct Authority to enforce transparency in bank account closures and suggested bolstering the Financial Ombudsman Service’s ability to handle disputes involving unfair demands for guarantees.
Kieran Jones, head of advocacy and communications at NACFB, commented: “Whilst the report outlines several critical issues, it disappointingly overlooks the full SME lending ecosystem, and the many ways SME borrowers reach lenders.
“It’s crucial for future reforms to dig deeper into origination routes and understand the nuanced challenges and opportunities within SME financing. Without this broader perspective, there is a risk of oversimplifying solutions and missing out on truly impactful changes that can drive sustainable growth in the SME sector.
“The ecosystem of brokers and intermediaries is fundamental, not merely a peripheral network. These finance professionals are central in linking SMEs with appropriate lenders, fostering environments more conducive to growth. This dynamic, knowledgeable, and human-led link is critical for nurturing the UK’s small business development.”
Speaking to the Guardian, the Committee’s chair, Conservative MP Harriett Baldwin, said: “There’s no hiding from the fact smaller firms have had a torrid time over the last few years.
“Unfortunately, what we have found over the course of the inquiry is that there are some instances where banks and regulators are making a tough world for small businesses needlessly tougher.
“Banks and regulators can’t wave a magic wand and solve all of the problems facing small businesses in this country, but they can certainly do more than they currently are. I hope banks, the regulators and the Treasury take careful note of what we’ve uncovered.”
The Association remains committed to working with government bodies, trade bodies and other financial institutions to develop policies that address these gaps and support the nuanced needs of SMEs.